Following the news that Japan-based Sumitomo Mitsui Financial Group (SMFG) agreed to invest around JPY10bn to buy 5% stake in the Philippines-based Rizal Commercial Banking Corp (RCBC);

Aurojyoti Bose, Lead Analyst at GlobalData, a leading data and analytics company, offers his view:

“The fresh injection of capital by SMFG will help RCBC in pursuing its digitization initiatives. On the other hand, for SMFG, the investment is in line with its strategy to expand presence in Asia, as it seeks growth outside a saturated home market with low interest rates and aging population denting growth.

“SMFG has been keeping an eye on promising investment targets and an analysis of GlobalData’s Financial Deals Database reveals that investment in RCBC is just one such investment by SMFG as earlier too it made similar investments in several Asian firms.

“During June, SMFG also made another strategic investment in Singapore-based blockchain trade platform Contour PTE Limited. In April 2021, it announced plans to acquire 49% stake in Vietnam-based FE Credit for a consideration of JPY150bn with a view to gain access to the country’s growing loan market. GlobalData expects SMFG making more such strategic investments in emerging countries with long-term growth potential.”